Taking Assessment of My Portfolio in 2006, Part 4: Investment Accounts

Now I turn my annual net worth review to my taxable stock investment accounts.

I'll be honest, last year's portfolio review of my investment accounts was a rude awakening for me. The indexes had significant returns, yet I lost money for the year in my individual stock investments. It was a tough pill to swallow and killed the confidence I had that I was doing the right things.

I believe that becoming finacially free requires me to become a good investor. Last years miserable performance made me realize I still have so much to learn. I started diving into investment books and feel more expierenced and wiser, but realize I still have a ways to go.

In 2006 I reduced the amount of money I contributed (compared to years past) to my taxable stock accounts. Coming into this review, I felt these stock investments had a mediocre year, gain some, but probably still behind the market indexes.

At the end of the year, most of these investments were in my Sharebuilder account and a sizeable number of Dividend Reinvestment Plans. I will looking at my holdings in IBM (my employer) at a seperate time. This table includes my begining and ending balance, 2006 contributions, total return for 2006, and the annual rate or return for each account:

 

12/31/2005

12/31/2006

Contrib.

Return

RoR

Dietz

Duke DRIP

$2,303.35

$3,016.18

$ 350.00

$362.83

15.75%

14.64%

Merck DRIP

$4,192.19

$173.24

$ (4,018.95)

$0.00

0.00%

0.00%

Bellsouth DRIP*

$4,122.57

$351.22

$ (4,798.17)

$1,026.82

24.91%

59.58%

CMS DRIP

$807.26

$999.44

$ 25.00

$167.18

20.71%

20.39%

PG DRIP

$1,639.39

$1,873.28

$ -

$233.89

14.27%

14.27%

GE DRIP

$2,990.81

$3,222.79

$ -

$231.98

7.76%

7.76%

Exxon DRIP

$2,658.69

$3,754.04

$ 100.00

$995.35

37.44%

36.75%

Medtronic DRIP

$3,656.33

$4,526.84

$ 1,000.00

($129.49)

-3.54%

-3.12%

Etrade*

$4,718.69

$0.00

$ (4,718.69)

$0.00

0.00%

0.00%

Pfizer DRIP

$13,084.33

$16,474.18

$ 1,030.00

$2,359.85

18.04%

17.35%

Lowes DRIP

$901.13

$1,255.92

$ 500.00

($145.21)

-16.11%

-12.61%

USG DRIP

$0.00

$656.49

$ 600.00

$56.49

NA

18.83%

Sharebuilder

$0.00

$15,591.22

$ 12,799.64

$2,791.58

NA

43.62%

Total

$41,074.74

$51,894.84

$ 2,868.83

$7,951.27

19.36%

18.70%

Wow! These results are much better than I expected. Its really nice to see my investments begin to pay off. I would like to think that all the investment books I have been reading made the difference, but the true is most of these investments were made years ago - I have to attribute these gains to patience more than anything.

Next I will take a look at the performance of my assets/investment(s) in my employer.

December 2005 Net Worth

$206,990

Part 1: 2006 Retained Earnings

+$65,579

Part 2: 2006 Retirement Accounts

+$17,504

Part 3: 2006 Cash Accounts

+ $1,426

Part 4: 2006 Investment Accounts

+ $7,951

Part 5: 2006 Company Ownership

+ $9,075

Part 6: 2006 Rental Property

 

December 2006 Net Worth

$317,904

Related in Net Worth Archive:

May 2012 Net Worth Update (-$28,098) (Jun 10, 2012) Highlights for MayWe like to take advantage of 0% APR balance transfers and other credit card offers for free money. We are actively looking at taking advantage of new credit card arbitrage opportunities. Our properties are listed on our...

April 2012 Net Worth Update (+$2,763) (May 09, 2012) Highlights for AprilWe like to take advantage of 0% APR balance transfers and other credit card offers for free money. We are actively looking at taking advantage of new credit card arbitrage opportunities. We received $1,000+ in rewards cash...

March 2012 Net Worth Update (+$22,032) (Apr 11, 2012) Highlights for MarchWe like to take advantage of 0% APR balance transfers and other credit card offers for free money. We are actively looking at taking advantage of new credit card arbitrage opportunities. We are close to earning ~$1,000...

Comments (11)


Nice work. 18.7% ROR overall is worth a gold star. Why so much $ in Pfizer? What is the catalyst that will bring about multiple expansion at a time with stagnating (and perhaps declining) sales due to patent expirations? Are you expecting acquisitions from them?

Good job!

Now that you've identified Lowes as the big loser, do you have a plan to address it?

ML

He yeah - my adjustment was to buy more of it ;-). I saw the price drop as a buying opportunity.

Congratulations. I just started reading your blog. Do you have formal investment education or did you pick this up on your own? If so what has helped you the most over time?

nice job. how do you go about deciding which stocks to purchase?

I'm assuming these investments are unrealized gains that exist in your taxable brokerage accounts. Can you really credit yourself with the 18% ROR if you haven't taken money off the table? What happens if one day the market tumbles?

I'm not sure I understand AP's comment... I think 2mil can credit himself with the 18% return based on the fact that he had money in the market, and didn't try to day trade.

What happens if you take your money out and the market continues to rise 8 years out of 11 (just like the past 120 years)? Are you saying is until it's time to cash out and live off the money, your gain is 0% and then it's a whopping 800% in that instant 40 years from now?

Why do you need to better than the indexes? I understand that you want the most bang for your buck, but will you come up short of your goal by only using them?

ExecutiveOpinion - I am a novice at best. There is a lot of references to material I have read and benfited from in this blog.

AP - I assume you mean my rate of return is lower because taxes hasn't been factored in?

Eric - thats a good point. Indexes are benchmarks that tell me that I could have done better by putting my money in index funds.

2 Million,
I'm just learning how to calculate my rates of return. In your table you've listed RoR and Dietz---is RoR Dollar Weighted Return and Deitz the Time Weighted?

Post a comment

(Comment moderation enabled.)

About 2millionblog.com

A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,574,185

Sponsors

New Personal Finance Articles




PF Blogs